“In a sector battling volatile commodity prices and global inflationary pressures, we see BHP as offering the best risk-reward proposition in its sector,” Raymond said.
“A special dividend looks unlikely, with BHP digesting the US$7 billion OZ Minerals Ltd (OZL) acquisition this half.
“We expect net debt to finish the year at approximately US$12 billion.
“We review our assumptions ahead of BHP’s June operational result on 20/07 and financial year 2023 earnings result on 22/08 and include the OZL acquisition into our model.
“BHP’s fourth quarter operating profit result will further steer our second half of financial year 2023 expectations.
“To that end, we expect a healthy quarter in Pilbara shipments (this is a key driver).
“The OZL acquisition adds some value, but, in particular, it will help Olympic Dam mine returns look better.
“We maintain an ADD rating, with an upgraded $51.70 per share target price (it was $50.40).
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